Carbon Tax

In 2010, Labor Prime Minister Julia Gillard decided to implement carbon tax in order to gain more support in response to the change in climate (http://isen.northwestern.edu/doc/pdf/URG-ISEN_ALloyd.Jun12_ProjectSummary.pdf) and on the 8th of November 2011, the ‘Clean Energy Legislative Package’ is then passed by the Senate which sets out the way that Australia will introduce the carbon tax to reduce carbon pollution (http://www.deloitte.com/view/en_AU/au/services/assurance/accountingtechnical/whatsnewguides/9db3989542e0f210VgnVCM3000001c56f00aRCRD.htm). (http://www.ato.gov.au/businesses/content.aspx?doc=/content/00286486.htm). On 2 November 2011, the Minerals Resource Rent Tax (MRRT) legislation was introduced into Parliament by the government which will affect all new and existing iron ore and coal projects in Australia (http://www.ato.gov.au/businesses/content.aspx?doc=/content/00286486.htm). Therefore this essay will discuss about how the introduction of carbon price mechanism results in a number of financial reporting considerations (http://www.deloitte.com/view/en_AU/au/services/assurance/accountingtechnical/whatsnewguides/9db3989542e0f210VgnVCM3000001c56f00aRCRD.htm) and also how the MRRT will be imposing on profits from coal and iron ore mining projects on BHP. Therefore this essay will discuss about how the introduction of carbon price mechanism results in a number of financial reporting considerations on an Australian mining company, BHP Billiton. (http://www.deloitte.com/view/en_AU/au/services/assurance/accountingtechnical/whatsnewguides/9db3989542e0f210VgnVCM3000001c56f00aRCRD.htm.

Carbon has always been around but it wasn’t being paid any attention. However, when it was given a name in the form of Carbon Tax, the idea of it has then suddenly become more real. This shows that something become real when we recognise them as such (Hines theory). The tax is aimed at helping to manage the cost and consequences of carbon pollution by motivating